Correlation Between Mesa Air and El Al

Can any of the company-specific risk be diversified away by investing in both Mesa Air and El Al at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Mesa Air and El Al into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Mesa Air Group and El Al Israel, you can compare the effects of market volatilities on Mesa Air and El Al and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Mesa Air with a short position of El Al. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mesa Air and El Al.

Diversification Opportunities for Mesa Air and El Al

-0.56

Correlation Coefficient

Mesa Air  El Al

Excellent diversification

The 3 months correlation between Mesa and ELALF is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Mesa Air Group and El Al Israel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on El Al Israel and Mesa Air is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Mesa Air Group are associated (or correlated) with El Al. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of El Al Israel has no effect on the direction of Mesa Air i.e., Mesa Air and El Al go up and down completely randomly.

Pair Corralation between Mesa Air and El Al

Given the investment horizon of 90 days Mesa Air is expected to generate 146.39 times less return on investment than El Al. In addition to that, Mesa Air is 1.3 times more volatile than El Al Israel. It trades about 0.0 of its total potential returns per unit of risk. El Al Israel is currently generating about 0.07 per unit of volatility. If you would invest  244.00  in El Al Israel on February 3, 2025 and sell it today you would earn a total of  40.00  from holding El Al Israel or generate 16.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.46%
Values	Daily Returns

Mesa Air Group  vs.  El Al Israel

Mesa Air Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Mesa Air Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Mesa Air is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

El Al Israel

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in El Al Israel are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak essential indicators, El Al reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Mesa Air and El Al

The main advantage of trading using opposite Mesa Air and El Al positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mesa Air position performs unexpectedly, El Al can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in El Al will offset losses from the drop in El Al's long position.

The idea behind Mesa Air Group and El Al Israel pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.